
JetBlue Airways IPO Valuation
Schill, Michael J....
JetBlue Airways IPO Valuation
Schill, Michael J.; Owen, John; Monroe, Garth; Cui, Cheng
F-1415 | Published August 20, 2003 | 19 pages. Case
Collection: Darden School of Business
Product Details
This case examines the April 2002 decision of JetBlue management to price the initial public offering of JetBlue stock during one of the worst periods in airline history. The case outlines JetBlue's innovative strategy and the associated strong financial performance over its initial two years. Students can value the stock and take a position on whether the current $22 to $24 per share filing range is appropriate. The case is designed to showcase corporate valuation using discounted cash flow and peer-company market multiples. A short video clip is available to registered faculty.
The case provides opportunities for the instructor to develop any of the following teaching objectives: -Review the instructional aspects of the equity issuance transaction -Explore the costs and benefits associated with public share offerings -Develop an appreciation for the challenges of valuing unseasoned firms -Hone corporate valuation skills, particularly using market multiples -Evaluate the received explanations of various finance anomalies, such as the IPO underpricing anomaly
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